VFA to pay $40 million to settle charges brought by SEC

The Securities and Exchange Commission charged Houston-based VALIC Financial Advisors Inc. (VFA) for failing to disclose to teachers and other investors practices that generated millions of dollars in fees and other financial benefits for VFA.

The SEC found that VFA failed to divulge that its parent company paid a for-profit entity owned by Florida K-12 teachers’ unions to promote VFA and its parent company services to teachers.

SEC penalty, fine

The US regulator also discovered that VFA did not disclose conflict of interest concerning millions of dollars of financial benefits that it received directly from advisory client mutual fund investments that were generally more expensive for clients than other mutual fund investment options available to clients.

VFA agreed to pay $40 million to settle these charges. The company agreed to cap advisory fees for all Florida K-12 teachers who currently participate in its advisory product in Florida’s retirement programs.

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